Advantage India as G20 skips deadline on Paris climate change pact

The Prime Minister’s point man at the summit, Arvind Panagariya, said that India was not ready in terms of domestic actions to ratify the agreement before 2016-end, but that it plans to do so at the earliest.

DESPITE pressure from the US and China, the final G20 communique has skipped any mention of the December 2016 deadline for member-countries to ratify the Paris Agreement on climate change. It has also avoided specifying a date for ending fossil fuel subsidies.

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Both the moves were strongly opposed by India during the three-day meetings of negotiators before the leaders’ summit on September 4-5.

In his intervention on the summit’s concluding day, Prime Minister Narendra Modi acknowledged that climate change was one of the foremost challenges, with the Paris Agreement showing the way forward. However, he said, “Focus should not just be on early ratification, but full success.”

The Prime Minister’s point man at the summit, Arvind Panagariya, said that India was not ready in terms of domestic actions to ratify the agreement before 2016-end, but that it plans to do so at the earliest.

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“There was an issue with respect to the G20 endorsing a proposal that all members would ratify the Paris Agreement by 2016. On that, there were some disagreements. So, the final communique plans to welcome countries that plan to ratify (the agreement) by 2016, but others have said they would try to proceed as soon as possible,” said Panagariya, India’s chief negotiator.

On fossil fuels, he said that many countries, including India, did not agree on a “date certain” for ending the subsidies. “There was a discussion on energy, including ending fossil fuel subsidies, and this has been a commitment from the past by the G20. But there was no agreement on that,” said Panagariya, who is also vice chairman of Niti Aayog.

The nine-page, 7,000-plus words communique, agreed to by the 20 interlocutors after discussions lasting over 40 hours, denounced protectionism and, significantly, brought the issue of excess steel capacity in China under the international radar. “The communique refers to excess capacity that exists in the market and how to deal with it on a more multilateral basis. There is a proposal to have a global forum under the auspices or support of the OECD (Organisation for Economic Co-operation and Development) and get the G20 members to pledge support to that,” Panagariya said.

Asked if the issue of China’s steel capacity impacted India, given that steel companies in the country were in a bad shape and contributing to the non-performing assets of banks, Panagariya said, “The discussions were in terms of general excess capacity in steel and some other industries. Steel was mentioned, others were not mentioned. We discussed how to deal with it on a multilateral basis. The fear is that if individual countries act, then it degenerates into protectionist actions by the countries. The discussion was whether you can do it in a more systematic manner so that it avoids protectionist measures.”

As far as trade is concerned, there was a strong sentiment that the G20 stands firmly against protectionism. “We support multilateralism, and the G20 wants regional trade agreements to be fully compatible with the multilateral trade liberalisation,” said Panagariya.

The Chinese presidency has also introduced investment as a new item on the agenda. “There are certain guiding principles that have been worked out and are elaborated in a separate document endorsed by the G20 leaders,” said Panagariya.

India further made a strong pitch for the adoption of measures to tackle BEPS (Base Erosion Profit Shifting) to countries that are not part of G20. “There is a general agreement on BEPS, but G20 alone cannot successfully carry the agenda. This is about profit shifting. And this can happen outside the G20 countries. The push by India is that we need other countries outside the G20 to also come on board,” he said.

The other important parts of the G20 summit discussions were sustainable growth with innovation being introduced as a key aspect, development, and other significant challenges before the world economy, including Brexit, terrorism, influx of refugees and AMR (Anti Microbial Resistance). “We have influenced outcomes in every area,” said Panagariya.